'Markets need big surprise to cross 17,500'

Dharmesh Mehta, Managing Director, Institutional Equities, Enam Securities talks with Rajesh Bhayani on the current market scenario

The market is moving in very tight range. Are the earnings not as expected or is the market worried about the Budget?

As expected, the earnings season has been good and the growth continuity is evident. The Budget will be an important event and the markets expect strong reforms in infrastructure spend to maintain the current growth rate. The markets are in a caution zone and valuations are rich hence one may see a correction soon. I believe that in the coming days, markets will continue to react to global trends and any bad news will have an immediate impact on stocks.

China has started tightening its monetary policy. Markets, as a result, are beginning to slip. Do you think India will follow?

I think monetary tightening including increase in interest rates should be expected sooner than later. In the next policy review meeting this month-end, the Reserve Bank of India is expected to take measures, which will have an impact on interest rate sensitive sectors like automobiles and consumer durables. Even banks might be impacted in the immediate future. Indian markets, in general, will follow global trends.

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